Costly Irish jobs may hinder future inward investment, survey reveals

IRELAND may find it difficult to continue attracting international investment as employment costs surge by 14% over the last three years.

This increase has pushed Ireland further up a league of Europe’s most costly places for employment as it comes in 16th place out of 24 countries in Europe in the Deloitte 2007 Remuneration Survey.

The cost of wages in Ireland stands at €38,541, an increase of 4.6% from €36,852 in 2006.

The survey said there is now a clear grouping of new member states offering cheaper labour costs.

Poland has the lowest cost of employment with a figure of €10,021, while seven countries, including Slovakia, Hungary and Latvia, have a cost of employment less than €13,000.

France tops the table with an average figure of €52,567, followed closely by Germany with €51,593.

Despite the high cost of employment, Ireland, at 15.9%, continues to have the lowest level of tax and social security.

Cyprus, which has the second lowest level, had a percentage of 17.87% in 2006 but this increased to 19.60% last year.

Tax Partner with Deloitte, Brian McDonald said: “The Government tax policy continues to support business by maintaining a low tax environment on employment and thus trying to ensure that tax continues not to be a negative factor for business investment in Ireland.

“It is clear that the Baltic States and the eastern European countries continue to be a challenge to Ireland’s continued success. As those economies develop and improve their infrastructure, it may prove difficult to maintain Ireland’s success in attracting international investment.

“All businesses are becoming more focused on labour and transport costs. For manufacturing concerns it may also make commercial sense to locate closer to the European markets.”

Factors examined in the report include the total cost of employment and cost of employment to the employee and to the employer.